The U.S. consumer electronics (CE) market has been hit disproportionately hard by the economic downturn, with U.S. households projected to spend 17% less on CE in 2010 than the previous year. This is the largest projected decline in CE spending among the 20 countries surveyed by the International Data Corp. (http://www.idc.com) in a recent ConsumerScape 3600 study. Strangely, this could be good news for Apple.
Let me explain.
Among these countries, the emerging BRIC markets (Brazil, Russia, India, and China) are expected to lead the CE recovery with household CE spending gains of more than 20% year over year. Despite the decline in U.S. CE spending, IDC found that important opportunities still exist within key product categories and across specific consumer market segments.
Even though U.S. consumers are spending less on CE, they still own more devices (an average of 15.4 major devices per household) than in other geographies. Moreover, U.S. consumers still tend to buy higher-end devices with more features and functions than consumers in other markets. And who makes the best high end devices? Apple!
The survey found U.S. consumers to be extremely price sensitive, a clear sign that the economic downturn has had an impact not only on spending habits, but also on consumer psychology. At the same time, U.S. consumers are far less likely to buy simple, basic devices, which is indicative of the population's strong affinity for consumer electronics, says IDC. Apple's devices are certainly simple, but far from basic. Those two attributes, plus Apple's "cool" factor, should keep the company buzzing along just fine, even in this tough economy.
The U.S. markets where IDC believes important opportunities exist for CE manufacturers include:
° As U.S. households shift toward notebooks, computers will increasingly be viewed as personal CE devices, fueling long-term growth in notebooks as well as computer peripherals. Again, this is good news for Apple.
° With only 28% of U.S. households owning a smartphone, growth in this category is a sure thing, to be accompanied by a range of features, data plans, and apps to suit different budgets. Can anyone say "increased iPhone sales"?
° Although HDTV ownership has already crossed the 50% mark among U.S. households, the market is expected to continue its dramatic growth trajectory
-- Dennis Sellers
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